Car Manufacturing - Marketing Potential of the US Automobile Manufacturers - Coursework Example

A Business Essay on Car Manufacturing Table of Contents Table of Contents 2 Executive Summary 3 Product and Country Background 3 of the Product, its Features, Benefits 4 Manufacturing 5 Entry Mode Selected 5 Elements of the political, social, cultural, and technological environment of the foreign country 6 Target Market and Competitor Analysis 7 Marketing analysis and strategies to include the four ‘P’s of the marketing plan 8 Organizational Design of the Company Domestically 9 Intellectual Property considerations 10 Potential export financing 10 Identified risks and how you will manage/mitigate those risks (e.g. operating, transfer) 11 Executive Summary The paper focuses on the understanding of the manner the Japanese Automobile firms tend to supply or export auto parts to automobile manufacturers in United States. It reflects on a hypothetical case of a automobile manufacturer operating in United States that tends to procure the support of the materials and parts generated by Japanese automakers through importing such from them. Potential issues related to the selection of the entry mode for setting up the production or manufacturing arm based in Japan and also sharing of intellectual assets are discussed in the paper pertaining to the stated case. The rationale and justification of taking Japan as the manufacturing region for the automobile product to be marketed in United States is also reflected. Along with the above formal discussion of the marketing strategies that ought to be taken by the automobile firm in United States is made to thereby help in generating an effective market share in the US markets. An analysis of the competitive position of the market through the use of SWOT and PEST analysis is generated to help reflect on the marketing potential of the US automobile manufacturers in meeting the needs of the young and modern customers. Product and Country Background The paper would deal with the production of consumer cars with the home country taken as United States. United States owing to lack of potential resources and efficiency is observed to depend on the importing of car products from Japan. It is observed that the car market of United States largely depends on car imports made from Japan such that where during 2011 the number of cars built in Japan to be marketed in United States amounted to 2.4 million the same rose to 3.3 million during 2012 (Naughton, 2013). The growth of imports of Japanese cars have increased in United States owing to the limited availability of required resources and also pertaining to the growing cultural significance between the two countries. Further the growing interest of the American consumers on Japanese cars is further observed owing to the capacity and the power of the car engines and also for its easy to be upgraded compared to its US counterparts. Increase in the demand for racing cars and also in the gaining of newer models in short-run periods is observed to enhance the dependency of the American consumers on imported Japanese cars (FURCHGOTT, 2012). The American car manufacturers to reduce the dependency on the Japanese car models are observed to focus on the importing of car parts to make the automobiles based on general assembly. Description of the Product, its Features, Benefits The basic goal of the carmakers in United States is to procure or import parts from Japanese carmakers to be readily assembled in the production of cars on a localized or regional basis. The above goal of producing assembled cars through importing of car parts from Japan is held to contribute in the reduction of imports of potential automobiles produced in Japan. Importing of parts would help reduce the level of import costs and would thereby help in enhancing the level of productivity involved. Similarly the production of assembled cars would also help in the reduction of car prices to be offered to the American consumers. Through the above business design the American consumers would gain the opportunity of availing Japanese car quality and features at an affordable cost. Further the above business model would also contribute in enhancing the competency level of the American automobile firms to produce their own car products rather than requiring depending on Japanese firms. Through the above method high priced and demanded car models produced in Japan are now found to be produced and marketed in United States thereby helping in creating employment opportunities and also in helping meet the automobile needs of the young customers (Salvatore, 2007). Manufacturing Focusing on the manufacturing activity, Japan is considered as the potential market for the manufacture of passenger cars such that it is estimated that Japan’s total export of automobile products to United States for the 2014 period would reach around 1.51 million (Benka & Krist, 2014). Further the focus on Japan to be made as the manufacturing center hails from the creation of the Trans-Pacific Partnership that enables the trade between Pacific nations like United States and Japan. Thus in the short-run period the organization would focus on outsourcing produced cars from leading automobile companies based in Japan to meet the needs of young consumers based in United States. In the long run period the organization would focus on the development of its indigenous potentials in the production of passenger cars thereby gradually reducing its dependency on Japanese auto manufacturers. Further Japan is taken as key manufacturing center for automobile products such that it operated based on a strong network of automobile firms like Nissan and Toyota. Operating based on a strong network is taken to generate due competency for the development of potential car models such that the same was imported to United States for meeting of consumer demands (James, 2005). Entry Mode Selected Relating to the entry mode the process of manufacturing outsourcing is to be undertaken to enhance the manufacturing, business and market potential of the organization based in United States. Through the use of manufacturing outsourcing the know-how and knick-knacks of the automobile producers related to Japan would be gained to help in the designing of automobiles with needed competencies. Manufacturing Outsourcing is considered as an effective entry mode such that the same contributes in reducing the cost of operations and production. Moreover the incorporation of manufacturing outsourcing also contributes in producing such products (here automobiles) that would not be possible owing to existence of due inefficiencies. The use of manufacturing outsourcing related to the gaining of cars manufactured by Japanese manufacturers is incorporated such that the same is taken to help in the gaining the benefits of state-of-the-art manufacturing infrastructures and also in the gaining of technical know-how of equipped and developed engineers. Further the use of manufacturing outsourcing would also contribute in gaining effective research and development potentials for the American automobile company such that the same can be used in the long term for generation of independent production and designing facilities and thus would reduce dependency on Japanese firms (VLASIC, TABUCHI, & DUHIGG, 2012). Elements of the political, social, cultural, and technological environment of the foreign country Government regulations related to Japan are observed to considerably influence the growth of energy efficient automobiles and also the growth of such cars that focus on reduction of carbon dioxide emission levels. Thus the automobile companies operating in Japan are required to produce such cars that operate generating lesser impacts on the natural environment and also requiring the use of fuel efficient engines (KPMG International , 2010). Further on the social and cultural paradigm it is observed that the Japanese consumers reflected considerable amount of changes for gradually adopting the westernized standards. The same was also observed relating to the automobile manufacturing operations owing to the opening up of branded western automobile firms to carry out their manufacturing and sales activities in the Japanese region. The styles and patterns of the western branded automobiles were incorporated by the Japanese producers such that the same contributed in altering the mindset of the Japanese consumers. Japanese consumers reflected shifting away from their ingrained traditions through the adopting of westernized cultures owing to the advent of globalization (Prasol, 2010). Technology transfer from different western automobile companies with also the increase in focus of the Japanese government in the production of energy efficient cars required the automobile companies like Toyota and Nissan to produce new technology automobiles that would fit the global markets (Goto-Jones, 2009). Target Market and Competitor Analysis The target market in United States would constitute of young customers that reflect an interest in the purchasing of quality and high performance automobiles that would incorporate the Japanese technology potential. The organization based in United States would focus on meeting the needs of the above target market through the procurement of automobile parts from Japan to meet their changing needs. Further the competitor analysis relating to the organization would be carried out through the use of PEST and SWOT Analysis. Reflecting on the SWOT Analysis the strength of the automobile company is viewed in that it tends to avail the benefits of outsourced manufacturing from outsourcing automobile parts from Japan. Depending on outsourced manufacturing contributes in reducing the manufacturing cost and thereby helps in enhancing the efficiency of the firm. The company thus can largely focus on assembling operations to produce the needed number of quality of cars to meet the needs of the consumers. The above activity however tends to generate needed weakness to the company for it would reflect greater dependency on the manufacturing and operational potential of the Japanese manufacturers that in turn would affect the confidence and motivation levels of the staffs involved. On the opportunity paradigm the assembled car company based in United States is held to gradually gain the capability and potential of producing like models related to their Japanese counterparts. The firm in the long run is taken to gain hold of the operational and manufacturing know-how in producing automobiles and thereby would be required less to depend on their Japanese suppliers. Finally reflecting on the threat side it is anticipated that a change brought about in the trade regulations relating to the trade activities carried out in the Pacific region would tend to largely affect the operations of the company. Similarly growth of companies operating on the same paradigm or business process in United States is also taken to affect the market for the assembling plant in the region. Reflecting on the political paradigm it is observed that changes in the bilateral relations between the two countries like United States and Japan would tend to affect the carrying out of the operations of the assembly plant in United States. Similarly on the politico-economic side the introduction of tariffs related to import activities is also taken to considerably affect the import of car parts from Japan to United States (Lincoln, 2010). On the social front the changes in the behavioral paradigms of the US consumers relating to the procurement of assembled vehicles is also taken to affect the production and marketing of automobiles through the procurement of Japanese auto parts. Finally on the technological front the introduction of new automobile technologies both relating to United States and also relating to Japan is taken to potentially affect the business making it backdated. Marketing analysis and strategies to include the four ‘P’s of the marketing plan The marketing analysis and strategies of the company would be based on the incorporation of 4Ps such that the same is a product company focusing on the designing of assembled consumer cars through the sourcing of auto parts from Japan. The Product Mix would focus on the designing of different models of automobiles or cars through the support of the research and design and also the raw materials sourced from Japanese firms. Relating to Price Mix the company focuses on incorporating the skimming or segmented pricing strategy such that the same would help in the designing of consumer cars relating to different income and social classes. Thus where premium pricing generated on some models would help in gaining of needed revenues low priced models can also be generated in the market to help in enhancing the market share. On the promotional aspect the company focuses on the incorporation of an effective promotional mix such that it would tend to advertise the product through the use of broadcast, print and internet media. Use of social media tools like Facebook, Twitter and LinkedIn would also contribute in socializing the product to mass consumers. Finally relating to the distribution paradigm the opening up of a number of stores related to different regions with also the incorporation of logistics and transportation facilities would contribute in generating greater accessibility of the products to the different consumers. Organizational Design of the Company Domestically The organizational structure of the company can be reflected as under. Intellectual Property considerations Relating to the aspect of intellectual property considerations it is observed that the Japan Automobile Manufacturers Association (JAMA) in a meeting carried out in October 2003 reflected on the sharing of potential information relating to trading of automobile parts and also other information pertaining to the setting of standards and certificates relating to the production of automobiles. Along with the above the Motor and Equipment Manufacturing Association in collaboration with US Industry Association further focused on the sharing of potential information related to the technical considerations. The above activities thus signify enhanced collaboration among the Japanese and the US Automakers that contribute in the sharing of intellectual assets in the use of auto parts in building of quality automobiles (JAPIA, 2014). Potential export financing Global corporations like the World Trade Organization and the International Monetary Fund contribute in the generation of export financing to thereby help and support the Japanese automakers to supply the automobile parts to their counterparts operating in United States. Through the use and support of export financing the Japanese automakers gains the potential of generating needed support to the United States automobile companies. The Japanese automakers tend to focus on gaining effective returns on the investments generated to the automobile companies based in United States and also in expanding their market shares to the foreign territories. The above export financing activity also contributed in meeting the corporate social responsibility of the Japanese automakers such that the investment focused on helping in the growth of automobile companies operating in United States that helps in generating employment (Karan, 2001). Identified risks and how you will manage/mitigate those risks (e.g. operating, transfer) The automobile company based in United States is required to conduct an effective survey to understand the consumer behavior relating to both prior and after the introduction of the assembled automobile product in the market. The survey made would contribute in the understanding of the changes in the expectation levels of the customers and thereby in generating needed modifications to serve the needed purpose. The above strategy would thereby contribute in validating the product changes made to help in gaining needed revenues and market shares. Further the risks relating to dumping of the products and the materials can be effectively reduced such that the company tends to focus on recycling activities to help in the regeneration of the products. Re-use of the products and materials also contributes in reduction of potential production and operational costs thereby promoting greater productivity. References Benka, S., & Krist, B. (2014, March 28). The Auto Industry Has a Lot at Stake in TPP and TTIP. Retrieved July 25, 2014, from Americas Trade Policy: http://americastradepolicy.com/the-auto-industry-has-a-lot-at-stake-in-tpp-and-ttip/#.U9I4p6Pzn0o FURCHGOTT, R. (2012, May 4). Importing Japan’s Forbidden Models. Retrieved July 25, 2014, from The New York Times: http://www.nytimes.com/2012/05/06/automobiles/importing-japans-forbidden-models.html?pagewanted=all&_r=0 Goto-Jones, C. (2009). Modern Japan: A Very Short Introduction. United States : Oxford University Press. James, W. (2005). Driving from Japan: Japanese Cars in America. United States : McFarland. JAPIA. (2014). Business plan. Retrieved July 25, 2014, from JAPIA: http://www.japia.or.jp/english/ Karan, P. (2001). Japan in the Bluegrass. Kentucky: University Press of Kentucky. KPMG International . (2010). The Transformation of the Automotive Industry: The Environmental Regulation Effect. Retrieved July 25, 2014, from KPMG: https://www.kpmg.com/US/en/industry/Japanese-Practice/Documents/2010-issue2/transformation-automotive-industry.pdf Lincoln, E. J. (2010). Troubled Times: U.S.-Japan Trade Relations in the 1990s. United States : Brookings Institution Press. Naughton, K. (2013, June 28). Japanese Automakers’ U.S. Production Soars 36%. Retrieved July 25, 2014, from Bloomberg: http://www.bloomberg.com/news/2013-06-27/japanese-automakers-u-s-production-soars-36-.html Prasol, A. F. (2010). Modern Japan: Origins of the Mind : Japanese Traditions and Approaches to Contemporary Life. United States : World Scientific. Salvatore, D. (2007). INTERNATIONAL ECONOMICS, 8TH ED. New Delhi: John Wiley & Sons. VLASIC, B., TABUCHI, H., & DUHIGG, C. (2012, August 4). In Pursuit of Nissan, a Jobs Lesson for the Tech Industry? Retrieved July 25, 2014, from The New York Times : http://www.nytimes.com/2012/08/05/business/the-ieconomy-nissans-move-to-us-offers-lessons-for-tech-industry.html?adxnnl=1&pagewanted=all&adxnnlx=1406290025-uHREzDZPL5v+Zl4ivNapvw Read More